Assigned to ED FOR
COMMITTEE
Assigned to ED FOR
COMMITTEE
ARIZONA STATE SENATE
Fifty-Third Legislature, Second Regular Session
school districts; tax levy; calculation
Purpose
Modifies statute relating to school district primary property taxes.
Background
School districts receive funding through a combination of local property taxes and state aid that is determined by the equalization formula. The equalization formula establishes spending limits for school districts, referred to as the equalization base, and an annual property tax rate applied to the property in the school district, referred to as the qualifying tax rate (QTR). If the amount generated from the QTR is insufficient to cover the equalization base, the school district is entitled to basic state aid.
Statute requires the county Board of Supervisors to levy school district taxes at the lesser of either the QTR or the school district support level subtracted by certain amounts received from the federal government per $100 of assessed valuation used for primary property taxes. It also requires the county school superintendent to annually validate any additional primary school district tax levy amount requests and levy the sum of the following: 1) the difference between the transportation revenue control limit (TRCL) and the transportation support level (TSL); 2) amounts concerning excess utilities, desegregation, bond issues portions of tuition charges and interest expenses for registering warrants; 3) tuition loss as prescribed in statute; 4) small school adjustments; 5) liabilities in excess; 6) adjacent ways; 7) the amount not captured by the QTR as a result of property subject to the government property lease excise tax; 8) an amount not levied due to an underestimated average daily membership or a judgement on a property tax appeal; and 9) an amount that corrects an outstanding cash deficit (A.R.S. § 15-992).
The Joint Legislative Budget Committee is required by February 15 each year to adjust the QTR in proportion to the statewide rate of appreciation or depreciation of existing property (A.R.S. § 41-1276). For FY 2018, the QTR is set at $4.0468 for unified school districts and $2.0234 for non-unified school districts.
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Requires a school district property tax levy to be equal to the lesser of either the:
a) applicable QTR; or
b) district equalization assistance base, rather than the district support level, subtracted by certain amounts as specified in statute.
2. Adds, to the list of additional primary school district tax levy amounts, a rate that would result in a levy equaling amounts pursuant to a qualifying dropout prevention program.
3. Specifies the rate for outstanding cash deficits includes any separately stated cash deficit from the prior fiscal year resulting from a deviation in the property tax roll, including resolutions or judgements relating to property tax appeals or the correction of a property tax error.
4. Removes the requirement that the county treasurer recommend the rate for cash deficits and instead requires the county school superintendent to recommend the rate for approval by the county Board of Supervisors.
5. Removes, from being included in the county school superintendent's budget estimate filed with each school district and the Property Tax Oversight Commission:
a) the total amount to be received for the year from the County School Fund and the Special County School Reserve Fund;
b) anticipated interest earnings; and
c) revenues equal to the amount included in the adopted maintenance and operation section of the budget.
6. Allows a school district to levy less than the difference between the TRCL and the TSL.
7. Repeals A.R.S § 15-993, relating to the levy of a tax to fund high school districts.
8. Makes technical and conforming changes.
9. Becomes effective on the general effective date.
House Action
WM 1/31/18 DP 9-0-0-0
3rd Read 2/08/18 57-0-2-0-1
Prepared by Senate Research
February 27, 2018
BL/lb